...Building a Better America—One Wealth Quintile at a Time Perspectives on Psychological Science 6(1) 9–12 ª The Author(s) 2011 Reprints and permission: sagepub.com/journalsPermissions.nav DOI: 10.1177/1745691610393524 http://pps.sagepub.com Michael I. Norton1 and Dan Ariely2 1 Harvard Business School, Boston, MA, and 2Department of Psychology, Duke University, Durham, NC Abstract Disagreements about the optimal level of wealth inequality underlie policy debates ranging from taxation to welfare. We attempt to insert the desires of ‘‘regular’’ Americans into these debates, by asking a nationally representative online panel to estimate the current distribution of wealth in the United States and to ‘‘build a better America’’ by constructing distributions with their ideal level of inequality. First, respondents dramatically underestimated the current level of wealth inequality. Second, respondents constructed ideal wealth distributions that were far more equitable than even their erroneously low estimates of the actual distribution. Most important from a policy perspective, we observed a surprising level of consensus: All demographic groups—even those not usually associated with wealth redistribution such as Republicans and the wealthy—desired a more equal distribution of wealth than the status quo. Keywords inequality, fairness, justice, political ideology, wealth, income Most scholars agree that wealth inequality in the United States is at historic highs,...
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...article, Wealth, Income, and Power, he examines wealth distribution in the United States, specifically financial inequality. He concludes that the wealthiest 10% of the United States effectively owns America, and that this is due in large part to an increase in unequal distribution of wealth between 1983 and 2004. Domhoff also states that the unequal wealth distribution is due in large part to tax cuts for the wealthy and the defeat of labor unions. Most of Domhoff’s information is accurate and includes strong, valid arguments and statements. However, there is room for improvement when identifying the subject of what is causing the inequality. The most important points made in Domhoff’s article are his statistics, the reason behind the unequal wealth distribution, and his closing statement concerning the top 10%. In his article, Domhoff cites many statistics regarding the distribution of wealth between America’s top and bottom percentiles. There is quite a bit of research to back up his claims, and his data is generally very accurate. However, when it comes to the cause of such gaps in wealth distribution, there is more to consider than simply tax cuts and labor unions. Domhoff begins with a broad overview of wealth distribution in the United States. He states that the top 1% held 34.6% of all privately held wealth, with 85% in the hands of the top 20%, leaving the bottom 80% in control of only 15% of privately held wealth. In terms of financial wealth, he states that the top...
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...Anthony Giovenco Political Science Inequality Paper 12-18-14 The Effects of Wealth Inequality in the United States Wealth inequality in the United States has grown tremendously since 1970. The United States continuously reveals higher rates of inequality as a result of perpetual support for free market capitalism. The high rates of wealth inequality cause the growing financial crisis to persist, lower socio-economic mobility, increase national poverty, and have adverse effects on health and well being. There is no doubt that wealth inequality in America has been escalating quickly; the portion of total income earned by the top one percent has doubled since the beginning of the 1970’s. The wealthy are the main beneficiaries regarding income inequality. In the latest consensus of wealth distribution, the top one percent of Americans owned thirty five percent of the nations private wealth, and the top ten percent took home about fifty percent of all income in 2012. This figure is greater than the bottom 90 percent combined. The question commonly asked concerning this matter: How and why is this becoming so quickly unequal is to be examined. First, we must explain what is meant by the term “wealth.” Wealth is the collection of the assets people own. This includes homes, stocks, savings for pension, and bank accounts, minus all existing debts. The main issue regarding wealth inequality is income inequality. Income equality has grown increasingly in the past 30 years....
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...Economic Inequality in the United States According to the Gross Domestic Product, also known as GDP, United States was measured the “largest” economy in the world (Mahoney 10/27/2015). However, all Americans do not share the high standard of living in the U.S. Levels of income and wealth inequality have always been high in the United States. While it is ideal for a democratic country like the United States to have political equality, the reality shows that this is not the case; as economic inequality ultimately causes political inequality under the current system of government. Income inequality has not only been prevalent, but has been polarizing further since the 1970s. Currently, twenty-percent of the population takes home 50% of the total income and the top 1% takes home 25% of the income and owns 40% of total wealth (Mahoney, 2015 October 27). While CEOs of the Fortune 100 makes over $14 million a year, an average worker makes $45,230 a year; this is a clear illustration of the income disparity in the United States. Further, it is worth mentioning that such trends are not necessary common; the United States has always had higher levels of income and wealth inequality when compared to other rich democracies (Mahoney, 2015 October 27). The average household income is currently stagnant, which suggest that the average household cannot easily grow economically in the U.S and cannot help close the income inequality gap. In the movie Inequality for All, the manager of Circuit...
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...Inequality begins its roots as long ago as humans started roaming this earth. Inequality can be described also as an imbalance, and with such an imbalance in terms of income, wealth, and class prosperity comes income inequality. Income inequality or economic inequality can be described as the imbalance between income of individuals or household within a country or class. When income inequality is brought up or mentioned, most people think about it in regards to the impoverished class and the ultra rich 1% but this is not the case. In a world that is becoming more and more integrated, economic inequality between the middle class and the top 1% is becoming much more relevant and much more of a problem that needs to be addressed. We live in a...
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...Final Paper Wealth Inequality in U.S. and Economic Efficiency Over the last decade, income inequality has become one of the most important issues in the U.S. and a subject of a lot of debate. There is a prevalent idea in the society that the wealth inequality in United States is currently at the highest level in the history after steadily raising for a number of decades. The financial crisis is said to have contributed to this significant gap between the top 1% and everybody else. People view it as an inherently negative thing, and fight hard to promote the equality and income redistribution. This paper examines the causes of inequality; the relationship between wealth inequality and economic growth and the hypothesis on how policy measures can be designed to mitigage the income disparity both in U.S. and in the rest of the world. The researh is based on the theory that inequality is an essential aspect of an efficient free market economy that adversely affects economic growth when in excess. When it comes to global wealth inequality, people often tend to accuse capitalism. In fact, the real laissez-faire capitalism doesn't exist anywhere on our planet. According to its definition, laissez faire is "an economic system in which transactions between private parties are free from intrusive government restrictions, tariffs, and subsidies, with only enough regulations to protect property rights." It has been previously proven free markets lead to the most efficient use of economic...
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...warns that the love of riches leads men further from the Kingdom of God and into a false idolization of wealth. This monetary worship pulls man away from God, and tears the seams of brotherhood that bond men together. Today, this bond between men has never been so frail and apathy has never been so vigorous. Millions of people die every year from preventable causes, including hunger, disease and countless other conditions, all derived from poverty. At the same time the richest 80 billionaires have the finances to solve world hunger, substantially increase the prevention of AIDS and effectively eradicate malaria. Wealth in itself is not evil; however, when humanity places riches above its fellow humans’ lives, it has reached a sinful state. The world has accepted material wealth at the price of what has become a sacrificial morality and love for mankind. The goal of this paper is to prove that global trends of economic inequality are unjustifiable from an economic/social standpoint, Scripture, and the recent position of the Catholic Church. Financial inequality is no new concept to the world. Since the beginnings of civilization there were the rich and there were the poor; many would argue that this is the natural state of society. From the Roman Empire until today, there has been a gap between the two segments. While almost all major religions warn man of the dangers of wealth and support charity, this gap between rich and poor has never been eradicated. Even so, all modernized...
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...Inequality in the United States In today’s American home life, the pressure of living the American dream has strained society. According to the article The Dangerous Consequences of Growing Inequality, the authors state that “a powerful consequence of growing inequality is an erosion in the amount of free time that families have.” (Collins and Yeskel 155) Though advancements have been made in the work environment, many are working harder to earn the same wages to try to keep up with the changing economy. While unemployment and debt are increasing, there has been a decline in health insurance, retirement security, and ability to earn a proper education. The United States’ gap of inequality is continuously increasing with the changing economy. Presently, many Americans are faces stresses that they did not in the past. The cost of living has risen, yet many cannot afford to maintain a comfortable lifestyle with the wages that they are receiving. The article Dangerous Consequences of Growing Inequality states, “Families continue to make up for falling wages in order to maintain a certain standard of living is by going deeper into debt.” (156) Because debt continues to grow, people are not able to save for their families. The use of credit cards has fueled this problem because people are allowed to borrow money constantly, but do not have the means to pay it back. The income of the average family should increase as the standard of living increases in order to lessen inequality...
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...Social Inequality What is social inequality? What are the sources of social inequality? For me, social inequality cannot be described in one sentence. Factors such as race, wealth, class, gender, age, among others all play roles into why people can sometimes be treated unfairly. However before I introspectively reflect on social inequality, there is one theory that suggests where today’s society is heading for me. Karl Marx is known as a prominent economic and political influence that lived during the 19th century. Marx’s theory of stratification is very applicable to where society, especially in the United States, is heading today. According to Marx, society would become divided into two classes, the dominant capitalist or the working class. Essentially the capitalists consist of the owners of production within a country while the working class consists of the laborers. This represents uneven distribution of wealth and resources, which creates a system of stratification. According to Professor Domhoff of the University of California, the top 20% of the workforce owned 89% of all privately held wealth in the United States as of 2010. There is already a large gap between social classes and will only continue to get worse if we continue down the same path as a nation. Whether through higher taxes on the wealthy or tax breaks on the working class, the gap needs to be closed. Money is king of today’s society whether people want to admit it or not. For me I think the uneven...
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...Introduction Income inequality means that the income is distributed in an uneven manner among a population. It generally refers to a society which the income gap between individuals or groups and also the international wealth gap. The percentage of income to a population is often presented by income inequality. It’s also considered as the gap between the rich and others and has been obviously growing for recently years. There have measures for income inequality. It’s important to view this data sets and measures as it can show the differences of a country, especially the advantages and disadvantages. Income inequality should have a clearer data or picture to explain the differences and can be also obtained by using those measures. The “Gini Coefficient” can measure income inequality. Gini Coefficient is the way to measure the distribution of nation residents’ income. Corrado Gini (Italian statistician and sociologist) is the person who developed and published it. The among values of distribution will be measured by Gini coefficient such as income levels. If everyone has the same income, it will be shown as Zero (perfect equality) in the Gini coefficient. Conversely, if Gini coefficient shows one mean that only got one person have the income, as know as perfect inequality. In the United States, there has been growing obviously for income inequality and the gap between rich and others. According to the report of Gini coefficient, united States have the high income inequality and continuously...
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...Social stratification exists in America because the wealth and power belongs to a small portion of the population. Wealthy people possess an enormous amount of power over the political system and are held in high esteem by our society. There is a general feeling that those who are wealthy and powerful are superior to the average person. Social stratification involves not only socio-economic inequality, but the belief system held by people in America. A stratified society exists when there is an unequal distribution of wealth, power and prestige. In American society, political power and wealth are not distributed equally (Johnson, 1996). Paul Krugman is an economist and author of the book, 'The Spiral of Inequality' (1996). Krugman believes corporate greed, the decline of organized labor and changes in the way goods are produced are the causes of the growing social and economic inequality in the United States (Anderson, 2003). There is an unspoken general agreement in America that certain occupations deserve higher wages and more respect. Professions, such as physicians, lawyers, athletes and actors, are held in high esteem, whereas custodians, waitresses and trash collectors are considered professions that are not worthy of respect or praise and require minimal skill or intelligence. America most definitely needs skilled physicians and lawyers, but it also needs custodians, trash collectors and others who perform much needed tasks in order for society to thrive and function...
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...The wealth chasm: a dangerous cocktail The street demonstrations of 2011 and 2012 are still fresh in our minds. Thousands of voices chanting, “We are the 99%!” and blockading the stock exchange have not left the psyche of American’s, and were successful in getting their message across. Before 2011, it was heard in whispers: “They have too much.” Now, it’s a shout. The rich are indeed doing very well for themselves. In fact, the wealth gap is almost unprecedented, except for right before the great depression, and the subsequent rebellion that shook the United States that ultimately resulted in the New Deal. (DeSilver, 2013) History doesn’t necessarily repeat, but we are seeing a world eerily similar to that which was in place before 1929: The rich hoarding all the money and anger simmering in the proletariat. Globally, the reaction against this sort of systemic looting of the people by the capitalist class is taking form and is becoming increasingly better organized and more violent. The global wealth gap is a combustible recipe for insurrection, and will result in a collapse of capitalism and the rise of radical left, and right wing ideologies if it is not fixed. The wealth gap in the world is at astonishing levels. A simple browse of the news, or the Facebook feed of any liberal-leaning page will bring up statistics that would seem like they were made up if we weren’t bombarded by them at all times, and the data to back them up. According to William Domhoff of the University...
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...Kiera Peavy Government 2305 5/29/14 Income Inequality Timothy Noah Richard A. Epstein * Inequality is good. (253) * Welch began by stating that “all economics results from inequality. Without inequality of priorities and capabilities, there would no trade, no specialization, and no surpluses produced by cooperation.” (253) * Waitresses, construction workers, dental assistants, call-center operators--- people in these jobs are essentially replaceable, and usually have bosses who don’t distinguish between individual initiative and insubordination. (254) * Welch said that he believed inequality was destructive only when “the low wage citizenry views society as unfair, when it views effort as not worthwhile, when upward mobility is impossible or so unlikely that its pursuit is not worthwhile.” (254) * Finally, Welch argued that the welfare state has made it too easy not to work at all. But the Great Divergence had a more significant impact on the working middle class than on the destitute. (254) * In most contexts, libertarians can fairly be said to place income in very high regard. (254) * The market is king, and what is the market if not a mighty river of money? (254) * Income isn’t what matters, Wilkinson argues; consumption is, and “the weight of the evidence shows that run- up in consumption inequality has been considerably less dramatic than the rise in income inequality.” (255) * The thought that the have-nots are compensating for their...
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...Plato’s ideal polity, inequality of outcome and inequality of opportunity are not essential, however, inequality in organization and gender inequality are necessary for a viable state. Inequality of outcome will harm the state as Plato believes that wealth and poverty will prevent citizens from fulfilling their duties. Moreover, inequality of outcome will cause division within the state, leading to conflict between classes and disrupting internal peace. Inequality of opportunity also stands in contrast to Plato’s ideal polity as the purpose of removing children from their families and providing communal education is to establish equal circumstances for all citizens. This will also allow the rulers to correctly identify which children will...
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...according to Alain de Botton in his book, Status Anxiety (1991). In his speculation, the condition of an individual’s life, drab or pleasant, does not determine how they view their “wealth.” Instead, it is how we compare ourselves to certain other individuals that we choose, specifically and usually those that we grow up with. Botton argues that with the growth of media, wealth, and prosperity in a society comes the unfortunate social anxiety in the forms of inequality, envy, and the most unforgiving of all, expectation. Shown throughout history, it is apparent that humans will view their living conditions as normal, despite how drab or unpleasant they might be, if peers that they grew up with are in similar conditions. In his argument, Botton denotes this group as our “reference group.” How we define wealth and prosperity may not always be in the form of currency. It...
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